Correlation Between Marchex and Knife River
Can any of the company-specific risk be diversified away by investing in both Marchex and Knife River at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Marchex and Knife River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marchex and Knife River, you can compare the effects of market volatilities on Marchex and Knife River and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Marchex with a short position of Knife River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marchex and Knife River.
Diversification Opportunities for Marchex and Knife River
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Marchex and Knife is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Marchex and Knife River in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knife River and Marchex is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Marchex are associated (or correlated) with Knife River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knife River has no effect on the direction of Marchex i.e., Marchex and Knife River go up and down completely randomly.
Pair Corralation between Marchex and Knife River
Given the investment horizon of 90 days Marchex is expected to generate 0.66 times more return on investment than Knife River. However, Marchex is 1.52 times less risky than Knife River. It trades about -0.04 of its potential returns per unit of risk. Knife River is currently generating about -0.17 per unit of risk. If you would invest 201.00 in Marchex on December 1, 2024 and sell it today you would lose (4.00) from holding Marchex or give up 1.99% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Marchex vs. Knife River
Performance |
Timeline |
Marchex |
Knife River |
Marchex and Knife River Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Marchex and Knife River
The main advantage of trading using opposite Marchex and Knife River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marchex position performs unexpectedly, Knife River can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Knife River will offset losses from the drop in Knife River's long position.Marchex vs. Entravision Communications | Marchex vs. Direct Digital Holdings | Marchex vs. Cimpress NV | Marchex vs. Townsquare Media |
Knife River vs. Ambipar Emergency Response | Knife River vs. FS KKR Capital | Knife River vs. 23Andme Holding Co | Knife River vs. Griffon |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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